Agenda item

Report of the Chamberlain.

The Board considered a report of the Chamberlain which provided the summary results of the triennial actuarial valuation of the Local Government Pension Fund as at 31 March 2016, which had been undertaken by the Fund’s Actuary, Barnett Waddingham. The report informed the Committee that the Pension Fund deficit had increased from £127.8m as at March 2013 to £149.3m as at March 2016 and recommended an increase in the employers’ contribution rate to the Fund, from 17.5% to 21%.

The Chamberlain advised that the Government Actuary’s Department (GAD) will be scrutinising the assumptions used by LGPS actuaries in the March 2016 valuations to ensure that a sufficiently prudent approach was being taken to financing LGPS benefits. The GAD’s report was expected to be available in 2018.

In response to a Member’s question, the Chamberlain advised that the Museum of London’s and City of London Academy‘s contributions were lower owing to the profile of membership which was generally younger than the Corporation. With regards to employee contribution, officers advised that this was set by Government, within the Scheme Regulations. Annemarie Allen from Barnett Waddingham reported that this was being reviewed and that any change to employee contributions would be likely to be from April 2019 as part of the cost cap controls.

In response to a question from the Deputy Chairman, the Chamberlain confirmed they were taking the valuations seriously but were not troubled by them. The Chairman expanded on this, confirming that, at its meeting on 31 January 2017, the Finance Committee recommended that the Pension Fund deficit recovery plan be set for 17 years from 2017/18, maintaining the 20 year recovery period agreed at the 2013 valuation, as well as increasing the employers’ overall contribution rate to 21% for the financial years 2017/18, 2018/19 and 2019/20. This was approved by the Court of Common Council as part of the budget setting process on 9 March 2017.

The Chairman advised that the Finance Committee were taking the valuation seriously and addressing it appropriately. Other Board Members agreed that they were heartened by this approach.

RESOLVED – That the report be noted.